Natural gas prices are rising amid increasing electricity consumption

By the end of the day, the Dow Jones Index (US30) rose by 0.26%. The S&P 500 Index (US500) gained 0.79%. The Technology‑heavy NASDAQ Index (US100) closed higher by 1.52%. The main driver of growth was the technology sector, where investors ignored concerns about AI‑company valuations in favor of strong expectations from semiconductor manufacturers: AMD shares jumped by 7.7%, Intel rose by 6%, and Nvidia added 2.6%. Additional support for the market came from the stabilization of oil prices at pre‑conflict levels, which reduced inflationary pressure and eased fears of aggressive Fed rate hikes.

European indices closed in the green on Tuesday. By the end of the day, Germany’s DAX (DE40) rose by 1.50%, France’s CAC 40 (FR40) closed up 0.44%, Spain’s IBEX 35 (ES35) gained 0.44%, and the UK’s FTSE 100 (UK100) finished the trading session higher by 0.12%. On Tuesday, European stock markets ended trading with solid gains thanks to easing inflationary pressure, which strengthened expectations of a softer monetary policy and lower borrowing costs for businesses. Weaker‑than‑expected inflation readings in Germany, France, and Italy reinforced investors’ belief that the price growth, which accelerated due to the Middle Eastern conflict, is beginning to stabilize. Against this backdrop, market participants revised expectations for ECB rates, reducing the likelihood of further tightening this year. This supported the bond market and improved credit activity predictions. The banking sector reacted with gains: shares of UniCredit, BNP Paribas, and ING rose by about 2%. Significant growth was also seen in technology and industrial companies – Siemens and Siemens Energy shares rose after positive prognosis for the development of the data‑center market, while ASML shares jumped 7% following renewed interest in semiconductor manufacturers.

The rise of silver to the level of 60 dollars per ounce after falling to seven‑month lows shows that the market has begun reacting more strongly to fundamental industrial demand rather than solely to interest‑rate factors. Unlike gold, silver remains both a safe‑haven metal and an industrial raw material, so its dynamics often differ during technological cycles. Support for prices is currently provided by renewed interest in the semiconductor sector, data‑processing centers, and the expansion of computing infrastructure – areas where silver is used due to its high electrical conductivity.

On Tuesday, oil prices remained around 70.2 dollars per barrel, while in the second quarter the market recorded a decline of roughly 30%, marking the sharpest quarterly drop since 2020. Pressure on prices intensified due to increased supply linked to rising shipping activity through the Strait of Hormuz after progress in peace negotiations, which allowed previously restricted volumes from the Persian Gulf to be released. Additional influence came from US sanctions exemptions for Iran, which added new oil volumes to the market amid already high supply, including shipments bypassing restrictions.

Natural gas prices in the US rose by more than 3%, approaching 3.30 dollars per MMBtu. The main growth factors were increased supply to LNG export terminals and expectations of record electricity consumption. Additional support for the market comes from a massive heat wave: high temperatures are forcing households to use cooling systems more actively, and in some regions, including New York, outlooks point to levels close to historical highs. Given projections of persistent extreme heat until mid‑July, increased load on gas‑fired power plants is expected, which provide about 40% of the country’s electricity generation.

On Tuesday, Japan’s Nikkei 225 (JP225) rose by 0.86%, China’s FTSE China A50 closed higher by 0.97%, Hong Kong’s Hang Seng (HK50) fell by 0.63%, and Australia’s ASX 200 (AU200) closed higher yesterday by 0.51%.

On Monday, the offshore yuan weakened to around 6.79 per dollar, breaking a two‑day rise amid growing investor concerns about China’s economic outlook. Negative sentiment was reinforced by the results of a private business‑activity survey, according to which the manufacturing PMI fell to a three‑month low (51.7 versus 51.8 in May). These data contrasted with official statistics published on June 30, which showed an increase in the manufacturing PMI, but markets focused on more alarming assessments from Goldman Sachs analysts: experts noted weak consumer confidence, a prolonged real‑estate crisis, and persistent pressure on the labor market. Pressure on the currency intensified despite the People’s Bank of China setting the daily midpoint at 6.8067 per dollar, the strongest fixing in three years.

The New Zealand dollar fell to 0.566 USD, consolidating near seven‑month lows amid continued strengthening of the US dollar. Investors remain cautious, assessing the monetary policy outlook of the Reserve Bank of New Zealand ahead of next week’s meeting. Analysts’ opinions on further rate hikes remain mixed: on the one hand, the market is pricing in the possibility of tightening; on the other hand, the recent decline in global oil prices reduces the need for aggressive measures.